Suppose that the dollar amount of damage involved in an automobile accident is an exponential random...

Suppose that the dollar amount of damage involved in an automobile accident is an exponential random variable X with mean $1000.

(a) What is the probability that the amount of an accident exceeds $400?

(b) If the deductible is $400, that means, the insurance company only pays the amount exceeding $400. What is the expected value of the amount that the insurance company pays per accident?

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orchestra answered 2 years ago

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